IIA Exam IIA-CIA-Part3 Topic 2 Question 80 Discussion

Actual exam question for IIA's IIA-CIA-Part3 exam

Question #: 80
Topic #: 2

Which of the following statements is true regarding activity-based costing (ABC)?

AAn ABC costing system is similar to conventional costing systems in how it treats the allocation of manufacturing overhead.

BAn ABC costing system uses a single unit-level basis to allocate overhead costs to products.

CAn ABC costing system may be used with either a job order or a process cost accounting system.

DThe primary disadvantage of an ABC costing system is less accurate product costing.

Show Suggested Answer

Suggested Answer: C

by Elvera at Jun 02, 2024, 07:35 AM

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Devorah

5 months ago

I'm going with C. It just seems the most logical and in line with what I know about ABC. Also, who would design a 'disadvantage' as the correct answer? That's just mean.

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Arlette

4 months ago

I agree, C seems like the most logical choice. And I agree, designing a disadvantage as the correct answer would be pretty mean.

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Arlette

5 months ago

I think C is the correct answer too. It makes sense to use ABC with both job order and process cost systems.

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Margret

6 months ago

Because ABC costing system provides more accurate product costing.

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Margret

6 months ago

I disagree, I believe the answer is D.

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Christoper

6 months ago

Why do you think that?

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B) An ABC costing system uses a single unit-level basis to allocate overhead costs to products. Hold on, that can't be right. Isn't the whole point of ABC to use multiple cost drivers to allocate overhead more precisely? This answer is just silly.

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Gregoria

5 months ago

D) The primary disadvantage of an ABC costing system is less accurate product costing.

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Lura

6 months ago

C) An ABC costing system may be used with either a job order or a process cost accounting system.

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Lynna

6 months ago

A) An ABC costing system is similar to conventional costing systems in how it treats the allocation of manufacturing overhead.

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Christoper

6 months ago

I think the answer is C.

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Keshia

6 months ago

D) The primary disadvantage of an ABC costing system is less accurate product costing. Really? I thought the whole idea of ABC was to improve product costing accuracy. This answer doesn't make much sense to me.

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Glory

6 months ago

A) An ABC costing system is similar to conventional costing systems in how it treats the allocation of manufacturing overhead. Hmm, I'm not sure about that one. Isn't the whole point of ABC to allocate overhead more accurately than traditional methods?

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Shelton

6 months ago

C) An ABC costing system may be used with either a job order or a process cost accounting system. This is correct, as ABC can be applied to both job order and process costing environments.

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Gladys

5 months ago

I agree, ABC is versatile and can be applied to different costing environments.

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Gladys

5 months ago

That's right, ABC can be used in both job order and process costing systems.

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Salome

5 months ago

I agree, ABC is versatile and can be applied to different costing systems.

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Salome

5 months ago

That's right, ABC can be used in both job order and process costing systems.

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Mari

5 months ago

D) The primary disadvantage of an ABC costing system is less accurate product costing.

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Nobuko

6 months ago

C) An ABC costing system may be used with either a job order or a process cost accounting system.

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Vicky

6 months ago

A) An ABC costing system is similar to conventional costing systems in how it treats the allocation of manufacturing overhead.

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IIA Exam IIA-CIA-Part3 Topic 2 Question 80 Discussion

Contribute your Thoughts:

Devorah

Arlette

Arlette

Margret

Margret

Christoper

Remona

Gregoria

Lura

Lynna

Christoper

Keshia

Glory

Shelton

Gladys

Gladys

Salome

Salome

Mari

Nobuko

Vicky